CHINA OVERSEAS(HK:00688) Guotai Junan Securities·2024-03-28 16:00Investment Rating - The report maintains a "Buy" rating for China Overseas Development (0688) [4] Core Views - In 2023, the company achieved revenue and net profit growth, with revenue reaching 202.5 billion RMB, up 12.3% year-on-year, and net profit at 25.6 billion RMB, up 10.1% year-on-year. The report adjusts the EPS for 2024-2025 to 2.41 RMB and 2.62 RMB, respectively, and introduces a new EPS for 2026 at 2.89 RMB [3][8] - The company's revenue structure remains stable, with a slight decline in gross margin to 20.3%. The real estate development revenue was 192.9 billion RMB, up 11.8% year-on-year, while non-development revenue from commercial property operations increased by 20.9% to 6.4 billion RMB [3] - The company maintained investment discipline, with land acquisition intensity rising to 46.6% in 2023. The equity land acquisition amount reached 115 billion RMB, up 47.2% year-on-year, focusing on high-quality assets in major cities [3] - The financial performance is robust, with a weighted average financing cost of approximately 3.6%, among the lowest in the industry, and a debt-to-asset ratio of 57.5% [3] Summary by Sections Financial Performance - Revenue for 2023 was 202.5 billion RMB, with a year-on-year increase of 12.3%. Net profit was 25.6 billion RMB, up 10.1% [3][8] - Gross margin decreased by 1 percentage point to 20.3%, while net margin fell by 0.3 percentage points to 12.6% [3] Investment Strategy - The company increased its land acquisition intensity by 7.1 percentage points to 46.6%, with a focus on high-energy cities [3] - The average land acquisition price rose by 10.4% to 21,438 RMB per square meter [3] Market Position - The company continues to solidify its leading position in the industry through strategic investments in quality assets [3]